On June 26, 2014, the Federal Reserve Board (“Board”) published on its website responses to frequently asked questions (“FAQs”) relating to enhanced prudential standards under Section 165 of the Dodd-Frank Act and its implementing Regulation YY. The FAQs were collected by Board staff during an industry outreach call or were otherwise asked by foreign banking organizations (“FBOs”). The FAQs relate to the implementation plan, U.S. structure, regulatory reporting, capital adequacy, capital stress testing, risk management, liquidity, and other topics relating to Regulation YY applicable to FBOs. The Board indicated that additional categories may be added as these FAQs are updated, and that the FAQs are not official interpretations.
The 55 FAQs as of June 26, 2014 illustrate how select provisions of the regulation apply to specific situations, but do not necessarily address all provisions that may apply to any given situation. Among other issues, the FAQs provide guidance on the scope, level of detail, and length of an implementation plan that an FBO must submit to the Federal Reserve, which must be designed to evaluate whether the FBO is on a path toward compliance with the final rule by July 1, 2016. With respect to entertaining requests for extensions of the deadline for filing implementation plans, the Board staff indicates that “all firms are expected to meet the filing deadline set forth in Regulation YY,” and that FBOs can seek clarification about the implementation plan requirements via the FBO Enhanced Prudential Standards mailbox.
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